2018 was an eventful year in the RMIS market. Several significant events took place to change the landscape of the marketplace.
The two primary forces driving the market are
- technology innovations that vendors are integrating into their solutions; and
- demands by more sophisticated risk management users and organizations.
Both of these forces are fueling rapid change and growth in this market.
The top-tier vendors in the market continue to stand out from the crowd in terms of capabilities, but specialty providers are making their mark and differentiating themselves through best-in-class capabilities, unique solutions, and competitive pricing. This year’s report notes three organizations that we classify as leaders in the industry: Origami Risk, Riskonnect, and Ventiv Technology.
Analysis and Commentary
We note the following trends in the market for 2019:
- Investment and consolidation in the marketplace
For many years, the RMIS market was dominated by broker-owned systems that operated as independent providers. The last broker-owned system, Marsh ClearSight, was sold to Riskonnect in 2018. This is the largest acquisition to take place in the RMIS market in some time because Marsh held the largest share of the market prior to the acquisition. This change to technology ownership in the market is a very good trend in our opinion.
In addition to the Marsh deal, there were several other significant events that took place in 2018. Earlier in the year, Riskonnect acquired GRC provider Aruvio; a private equity firm took a minority stake in Origami Risk; and Ventiv acquired David Corporation at the beginning of 2019. The big three (Riskonnect, Ventiv, Origami Risk) are all private-equity backed, which provides its own dynamics for the future of the marketplace.
- Expanding definition of risk
The market is also reacting to the ever-expanding definition of risk and the increased importance of risk management in organizations. Historically, RMIS focused on more traditional risks, but over the past few years, we have seen an increase in support for broader requirements. Enterprise risk, governance risk, and compliance are becoming more standard features in the marketplace, although the capabilities from RMIS providers vary. While there is an entire market of enterprise risk management (ERM) vendors, we are seeing the RMIS vendors aggressively pursuing this market and expanding their capabilities.
- Specialty providers on the rise
While we have seen consolidation at the top of the market, we are seeing a trend of an increase in specialty providers. These providers focus on specific solutions and do not offer the broad capabilities that some RMIS providers do. Many are early to market and utilizing new technology trends to solve problems. We have carved out the specialty providers in this year’s report.
- Tech innovation impacting RMIS market
Technology is also driving the innovation in the industry. It takes time for newer tech innovations to make their way into mainstream use. For example, cloud and mobile computing took a number of years to become mainstays in the industry, but today they are prevalent based on our survey. Newer technology trends such as analytics and big data have not been adopted as widely, although they are offered by all the top vendors. Other trends to watch are the internet of things and artificial intelligence, which will have a significant impact on the risk technology market in the years to come.
Conclusion
The RMIS market continues to evolve very quickly. With private equity playing a bigger role in the industry, we do not expect things to slow down. We also believe that we have not seen the last of mergers and acquisitions and wouldn’t be surprised to see more activity in 2019.
That said, we are watching closely how these recent acquisitions affect the vendors’ ability to deliver, how they integrate disparate systems, and how they go-to-market moving forward.